Remember: DOE rejected most of the electric car startups that wanted loans

The Fisker debacle is shining a spotlight on the influence that venture capitalists have had — or have attempted to have — on government support. The Wall Street Journal published a piece late last week highlighting emails from Kleiner Perkins partner Ray Lane asking for movement on approval of a loan from the Department of Energy for fuel efficient car startup Next AutoWorks (formerly called V-Vehicle).

Next AutoWorks didn’t receive the loan. And rightly so. Next AutoWorks made Fisker look like a good idea (both companies were backed by Kleiner Perkins, by the way). The company struggled right out of the gate with its gas-sipping, low cost, plastic car, and never went anywhere with it.

But there were another almost half dozen alternative vehicle startups that asked the DOE for loans out of the Advanced Technology Vehicle Manufacturing Program (created in 2007 and funded in 2008) but that didn’t receive loans: Bright Automotive, Aptera, Coda, Think, and Carbon Motors. And these are just companies that publicly discussed the loans with the media.

Car startup

Loan status

Car

Cars produced

Private backers

Tesla Motors

Awarded, $465M, full payment received.

All electric sedan the Model S. Previously made all electric Roadster.

Tesla and Fisker were the only startups that received funding from the ATVM program, and half of Fisker’s loan was withheld. The close to $200 million that went to Fisker represents around 2 percent of the entire ATVM loan portfolio advocated. The bulk of the loans went to the big automakers, Nissan and Ford. The DOE became much more cautious with this program in 2011 (coinciding with Solyndra’s struggles), and has since frozen the remaining $16.6 billion of the $25 billion program.

All in all, the DOE was actually pretty cautious and conservative with the ATVM loan funding. The program definitely had problems, to be sure, including some things I outlined in this previous post: miscommunication with companies, and better early due diligence. It’s also questionable whether the government should be giving such sizable amounts to single companies, instead of putting those funds into other incentives like tax breaks.

But the ATVM program wasn’t an example of massive misspending from the DOE; it was a program that was stalled before it was really even started.